Indonesia is not only the fourth most populous nation in the world after China, India, and the U.S. respectively, but it is also the fastest growing and largest online retail market in the Asean1) region. Despite this, however, B2C online retail sales account for only 0.2% of world’s total.

According to research from CLSA, in addition to the attraction of a very large population, of whom around 50% are under the age of 30 years, increased smartphone and 4G penetration should provide a major boost to online retail in Indonesia. Other factors underpinning the very real potential for significant growth in online retail in the country are both rising income levels, and a still low level of organized offline retail.

It will be interesting to see, in five years’ time, just how B2C online retail has taken off in Indonesia.

Indonesia: Total B2C Online Retail Sales
(excluding Tax)

Source: CLSA and Euromonitor

About the Author:

David I. Feygenson (MS, Finance and Economics, London School of Economics; BS, Economics, The Wharton School, University of Pennsylvania) is a Senior Emerging Markets Equity Analyst at VanEck. Mr. Feygenson has over a decade of buy-side investment experience and previously held positions at Wellington Management Co and Mirae Asset Global Investments.

The article above is an opinion of the author and does not necessarily reflect the opinion of MV Index Solutions or its affiliates.

1) Asean – Association of Southeast Asian Nations: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam